Preponderance of the evidence

The greater weight of the evidence required in a civil (non-criminal) lawsuit for the trier of fact (jury or judge without a jury) to decide in favor of one side or the other. This preponderance is based on the more convincing evidence and its probable truth or accuracy, and not on the amount of evidence. Thus, one clearly knowledgeable witness may provide a preponderance of evidence over a dozen witnesses with hazy testimony, or a signed agreement with definite terms may outweigh opinions or speculation about what the parties intended. Preponderance of the evidence is required in a civil case and is contrasted with “beyond a reasonable doubt,” which is the more severe test of evidence required to convict in a criminal trial. No matter what the definition stated in various legal opinions, the meaning is somewhat subjective.

I agree. Posting what someone says word for word (the truth) is always best practice. In addition, where applicable, providing a link to that truth is just as important. Apologies accepted.

Go make up a value, and seek the truth.

The GSEs write “policy” for the loans they will buy in the secondary market.

One of the “policies” the GSEs wrote; is the Appraiser Independence REQUIREMENTS which includes that no interested party can interfere with the development and reporting of an appraisal.

The GSEs, are interested parties, they collect all the data from appraisal reports and resell it, in competition with appraisers. They do not “control” appraisals. They can accept or reject the loan, or, have the lender order an appraisal that meets their “Guidelines”.

This still is the USA not some other place.

The COVID reports could have been reported on the 1004P fully coded for upload to the system. Pre-written to accept interior and other “condition data” from sources, other than the appraiser. And yet,
they are not ordered that way.

And FAQs are NOT USPAP. Says so on page 1 of USPAP.

Appraisers need to stop, and see a bigger picture. See the whole picture. Or just read the financial news. Look at the corps chomping at the bit waiting on the foreclosures to happen so they can take up all those SFRs, at discount prices, to be used a rental properties.

Consider that many of those foreclosures had appraisal waivers, were hybrid appraisals, that now are suddenly not acceptable, or had the infamous, Restricted Use Reports, that never should have made it to the GSEs,

All the while that the GSEs appraisal “policies” where that only the forms listed in the Selling Guide were acceptable.

Forbearance ends, next month? But it will end, and many jobs won’t come back. And many appraisers, well, let’s just say, they should have seen the bigger picture.

So, if an appraiser cannot make any assumptions except those boilerplated by FNMA; and the only source is mls or an owner or some other third party that would require use of an assumption to avoid being misleading then you are agreeing that no appraisal can be done?

The purpose of this blog is to communicate with others, share ideas, come up with solutions… not to attack other appraisers.

We welcome critical posts and opposing points of view and value robust and civil discourse. You may openly disagree, but state your case in an atmosphere of mutual respect, in which everyone has a right to a particular view about the topic of conversation. Please keep remarks about the topic at hand, and PLEASE avoid personal attacks. If the poster gets you upset, it’s the Internet and you can walk away from it.

Personal attacks harm the collegial atmosphere we encourage on this blog.

“What I’m saying here is we might need to put boots in the living room on occasion. But really, most of the time that may not really be necessary.”
https://theappraisercoach.com/comp-photos-inspections-and-such-during-a-pandemic/

There are those that seek the problems, find the problems, disclose the problems, interpret the problems all in the name of having high moral standards, while others avoid the truth to churn out AMC volume.

Seek the truth.

You answered the primary question you pose in your own post above. For a GSE 2055, if the appraiser does not have enough data (e.g.. does not have condition data). then the appraiser should not do the assignment…just as you said above and just as stated in the FAQs that the GSEs have provided.

“The appraiser has relied on data provided by third-parties in this appraisal report. Such data may include, but is not limited to, flood maps, multiple listing real estate services, tax assessment records, public land records, satellite imagery, virtual street views, property data services, surveys, engineering reports, and property data aggregations. After examination of the data and data sources, the appraiser has used only the data he or she considers reliable. The appraiser assumes there are no material omissions and makes no guarantees, express or implied, regarding the accuracy of this data.”

NOT ONE of the above-identified assumptions specifies ASSUMED condition conclusions based upon an owner’s verbal or written or photo evidence, OR agents. So yes, Danny an EA IS necessary. ALL assumptions are required to be identified.

Danny I don’t refer indirectly or ambiguously when I’m talking about a specific appraiser as I am in your case.

Make no mistake, I am saying that YOU, Danny Wiley, have been mischaracterizing FNMA requirements and limitations. For years. You can send me another veiled private email inference about how it’s such a serious issue given your current position, but I won’t keep that private like I did the last one. I offered to work collaboratively to resolve this. Remember I asked where you wanted to go with this in my response? I’ll take your post above as a public response.

IF you think you have some kind of recourse to having your inaccurate claims disputed and refuted in public, then be my guest. DO let me know if you are still speaking on behalf of Freddie Mac; FNMA and all the GSEs as was originally apparent and suggested in your posts. I want to know just how deep the pockets are for any cross-complaint.

Refer to your own fourth (excluding “one poster wrote” line) full para; last line “… information provided by the property owner, etc.” from your own post above.
You don’t see a conflict with certification #10 in the above?

Here is certification #10 Danny.
“10. I verified, from a disinterested source, all information in this report that was provided by parties who have a financial interest in the sale or financing of the subject property.”

Please tell readers how exactly on a listed property that ‘condition’ reported in mls could be from a disinterested source? (since 2005). How would verification with an owner “since 2005” comport with certification #10? How would information from an unlisted property’s owner fit within certification #10?

Danny are you too intellectually dishonest to deal with the entire dispute, rather than trying to selectively parse one-liners to suit the sophist argument of the moment?

Remember you have also said no extraordinary assumptions allowed? Though you reimagined that definition as somehow being separate from ‘ordinary’ assumptions that are not found in USPAP at all. I pointed out where the same certs and limiting conditions YOU cite also permit the appraiser to expand the scope of work which in turn includes extraordinary assumptions, and you went back to the spurious ‘That’s the way its always been argument’.

There is no way an appraiser can safely & factually report the interior condition of a property he or she has not personally observed EXCEPT through the use of an assumption, or hypothetical condition. Anything else is misleading or irresponsible.

Whether that assumption is based on an mls being accurate and representative on the effective date of value; or that an ASSUMPTION is made that an interviewed owner accurately reported conditions; OR that an ASSUMPTION is made that interior photos provided are of the subject and in fact representative of overall conditions, AND that no significant defects have been omitted; OR a reasonable belief that a well-maintained exterior is ASSUMED indicative of a similarly maintained interior.

Public records; permits, tax records, and the like do not provide credible indications of interior conditions as of a specific subsequent date.

The confusion results from poorly cobbled together forms and certs by FNMA & FreddieMac and then petty bureaucrats trying to rationalize torturing the English language to make it appear no mistake was made; or that long out of date forms are still relevant.

Danny, I say again reliance on third-party data given the new definition of “misleading” in USPAP is not possible without an assumption. An assumption specific to the appraisal.

So again, please do tell us how since 2005 you think appraisers have always been required on an EXTERIOR property appraisal to report condition without using any assumptions? Dont keep telling us to verify the same we do with comparables. We verify comparables by mls; INTERVIEWs with interested parties and direct observations to the extent feasible. Two of these three ways are forbidden according to cert 10 “since 2005”.

Until FNMA or Freddie both acknowledge they will permit reasonable, clearly identified assumptions under Covid or non covid conditions, any exterior inspection based report or desktop (2055 or 2055-Covid & 1004-Covid) must be refused by appraisers…or risk being misleading under the new USPAP definition of the term.

Read the regulations?
HAHAHAHA

Awe come on. It’s been 10 years and they haven’t “read” the Dodd Frank
HAHAHAHAHHAHA

How about read the definition of “market value” and see that it does not include “panic buying”

And “panic buying” is not “typical motivation” in an open and competitive market that would result in a “fair” sale.

One pre-printed definition to read on the forms they are certifying too, and you want them to read regulations?
HAHAHAHAHA

And with “closed boarders” the markets, especially on the coasts, are not “open” unless you can show that foreigners never buy homes in those areas.
HAHAHAHA

Thanks for the laughs Dan. Maybe you should stop doing that.

That one is called; “The Covid Defense.”

The government want’s a covid appraisal. That’s fine.

Enter the covid defense.

I don’t make the rules, I just play the game.

The ‘new normal’. Be careful what you wish for.

Face the facts guys, you guys are arguing in a bottle, behind closed doors.

‘covid assignments’… Convoluted language with a misnomer on the side. Genius. As usual, government ran systems create more problems than they solve.

I assume the above certifications are true and reliable. But I can not tell you the certifications are true and reliable for certain, since top level persons in the appraisal industry can’t figure it out or come to a consensus on the matter either.

Furthermore, my powers of observation were diminished due to compulsory mask wearing orders in the county where this property was located. For fear of going to jail or thousands of dollars of fines, I kept the mask on although I was light headed, short of oxygen, could not see or function at optimal capacity, my glasses were fogging up. I will be available to revisit my analysis and conclusions at a later date when imposed restrictions to quality appraisal development process are no longer hindered by people whom suddenly decided to be hypochondriacs.

Hypochondria: A hypochondriac is someone who lives with the fear that they have a serious, but undiagnosed medical condition, even though diagnostic tests show there is nothing wrong with them. Hypochondriacs experience extreme anxiety from the bodily responses most people take for granted.

One poster wrote:

“FNMA and Freddie are trying to pretend that they need to find mls or owner representations has always existed. We ALL know that is not true with the possible exception of Danny Wiley.”

I don’t know of anyone asserting it has always been true. But, since 2005 the 2055 has addressed the requirement to have data on the subject property. The language on the 2055 says ( and this is a direct quote from the form that anyone can verify for themselves by just looking at the form):

“The appraiser must be able to obtain adequate information about the physical characteristics (including, but not limited to, condition, room count, gross living area, etc.) of the subject property from the exterior-only inspection and reliable public
and/or private sources to perform this appraisal. The appraiser should use the same type of data sources that he or she uses for comparable sales such as, but not limited to, multiple listing services, tax and assessment records, prior inspections,
appraisal files, information provided by the property owner, etc.”

That is NOT new language. What is unclear about that statement?

The form also says:
“Modifications, additions, or deletions to the intended use, intended user, definition of market value, or assumptions and limiting conditions are not permitted”

This is also language that has existed since 2005. Can’t add assumption. Seems pretty clear.

As for the use of third party data for COVID reports, can someone please explain why the EA some are suggesting is necessary, given what is stated in Cert 3 and Cert 5?

For those who may not have read it, Cert 3 on COVID certs says:

“The appraiser has relied on data provided by third-parties in this appraisal report. Such data may include, but is not limited to, flood maps, multiple listing real estate services, tax assessment records, public land records, satellite imagery, virtual street views, property data services, surveys, engineering reports, and property data aggregations. After examination of the data and data sources, the appraiser has used only the data he or she considers reliable. The appraiser assumes there are no material omissions and makes no guarantees, express or implied, regarding the accuracy of this data.”

Cert 5 also covers the appraiser for adverse conditions not disclosed.

So, the EA some are suggesting is (1) not an EA at all, because it is an ordinary assumption included in all COVID assignments, and (2) unnecessary, as it is already stated on the form.

A perfect example of why we MUST decline orders where insufficient information is available OR where assignment conditions do not permit us to include our use of assumptions.

“Should be ok” is never an acceptable metric. TAF redefined “misleading” to cover intentional AND unintentional oversights or omissions (errors in reporting) ie: Condition. The TN appraiser seems like he or she did a thorough job within the scope of the assignment ordered. Subsequently, the expectations of the client were increased.

He was lucky. Had the client wished, they could have submitted a formal complaint to the state (most do) and I suspect a different outcome may (or at least could) have resulted.

Thank you for posting this.

Sorry, it is not that simple….at certain times, the lender is NOT a friend but a FOE.

Appraising-after-a-natural-disaster
SOURCE: Claim Alerts
https://www.liability.com/claim-alerts/appraising-after-a-natural-disaster.aspx

Added effort today may save you from a claim later

An appraiser in Tennessee was retained by a lender to do an appraisal, including an interior inspection, of a single-family home for the purpose of a purchase loan. About a year later the appraiser was called back by the lender to do a drive by appraisal of the same property in connection with a refinance loan. Within months of this drive by appraisal, the area where the home was located suffered flood damage after a period of heavy rainfall. A short time thereafter, the borrower defaulted on the loan and the lender foreclosed.

The appraiser was once again asked to do a drive by appraisal for the foreclosure. He was expected to comment, specifically, as to whether or not the property showed “any evidence of exposure to recent flooding that affected the area”. The appraiser was very uncomfortable with this request and explained to the lender that he might not be in a position to make such an assessment, especially when conducting only a drive by inspection. The lender asked simply that the appraiser “do his best”.

The lender was a good and long time client of the appraiser, so he did not want to turn down the assignment. However, he did not want to take on liability exposure. The appraiser always included extra language in drive by appraisals that reiterated that his inspection was limited to a simple curbside viewing of the property. In this case, the appraiser also added language explaining the property was located in an area that had been recently affected by flooding and there did not appear to be any visible, external evidence of any floodwaters affecting the subject property, such as visible water stains. The appraiser also took several photos of the property, although he simply included the usual front and rear photos when he submitted the report to the client.

Sometime later, the appraiser was notified of a claim by the lender. Within days of the appraiser’s last inspection of the property, a major portion of the roof and ceiling had collapsed into the house. An engineer hired by the lender reported that he believed a contributing cause of the roof collapse was damage to structural supports caused by recent flooding. The lender wanted to know why the appraiser had failed to report the structural problems and indicated an intent to hold the appraiser accountable for the cost to repair.

We assisted the appraiser in dealing with this very sensitive claim. The appraiser was angry about the lender trying to place blame on him, yet he wanted very much to maintain his client relationship. He drafted a letter explaining his initial hesitancy to complete the assignment. He highlighted all of the language he had added to his report about only inspecting visible areas. He included copies of the photos he had taken which did not depict anything wrong with the structure or with the roof. After sending in this response, the appraiser heard nothing further from the lender until he got an assignment to perform another new appraisal. The lender never officially abandoned the claim, but nothing further was mentioned and no lawsuit was ever filed. The appraiser continued to receive assignments and we closed the claim file

The ‘why’ is because they said to. FNMA can computer read and ‘score’ a 1004. They cannot do that with 2055. The directions fnma gave us re covid can be done and produce credible reports. What cannot be done is to state definitively that conditions you have not observed are ‘factual’ so that is where an assumption becomes necessary.

Just put the assumption somewhere after EA definitions and impact statement Don’t make it a big deal. “Appraiser assumes 3rd party data provided by owner or mls is accurate unless otherwise noted herein.”

IF anyone insists it is not permitted then tell them to cancel the appraisal; keep the fee and provide a letter to you stating that they have accepted your withdrawal on the basis that a credible report cannot be made that is definitively not misleading without the cited assumption; AND that the appraisal will not be used in any way for any purpose. USPAP prevails.

What was the issue/case in Colorado, cjk?